IFLNG’s Gas Export Deal with Iran Shelved

Iran has decided to put on hold its deal with IFLNG on the export of liquefied natural gas (LNG), the company confirmed to World Maritime News.

IFLNG AS, owned by KGRC, controlled by Kharg Petroleum Company of Iran, and Hemla Vantage AS of Norway, signed a gas sales and purchase agreement with the National Iranian Oil Company (NIOC) in October, 2017.

Under the contract, Iran was supposed to utilize the CFLNG-barge from Exmar to pioneer LNG production at-shore of the Islamic Republic of Iran.

NIOC was supposed to hire the FLNG facility for a period of 20 years to produce gas from offshore oilfields near Kharg Island.

Caribbean FLNG, delivered to Exmar by Chinese Wison Offshore and Marine in July 2017, has a capacity to produce around 0.5 million tonnes of LNG per year.

Following the criticism from some Iranian MPs, Iran’s oil minister Bijan Namdar Zanganeh announced on February 4, 2018, that the deal is put on hold due to the contractual terms.

Namely, the critics claimed that the price of gas bound for the Norwegian side was unacceptably low.

“NIOC has requested new options to be negotiated in order to keep the unique position for early export of LNG from the country. Part of this process could be a change in the ownership in IFLNG and its jurisdiction,” IFLNG said in a statement to WMN.

The deal was expected to see Iran transform from a traditional gas player to a modern exporter of LNG, especially on the back of the lifting of sanctions against the country two years ago.